“Xiaomi Corp. fell as much as 6% on its debut, as an escalating trade war and uncertainty about its valuation combined to dampen Hong Kong’s biggest coming-out party in two years,” Bloomberg reports. “The eight-year-old Chinese smartphone maker traded as low as HK$16.00 compared with its HK$17 initial public offering price. That puts the company co-founded by billionaire Lei Jun on pace to become the worst first-day performance for a $1 billion-plus Hong Kong IPO since 2011. Xiaomi’s market value is now in the neighborhood of $50 billion, becoming the world’s third-largest listed maker of mobile devices but a far cry from the $100 billion touted last year.”

“Xiaomi’s high-profile stumble may have a chilling effect on a swathe of Chinese tech corporations keen on raising capital this year to fuel their ambitions, from Meituan Dianping in Hong Kong to Tencent Music in the U.S. It’s a lukewarm showing for an ambitious smartphone label with designs on expanding globally and transforming from a low-margin hardware company into an internet services player in the mold of Apple Inc.,” Bloomberg reports. “Xiaomi priced its IPO at earnings multiples higher than more established tech giants, including Apple.”

“Xiaomi’s tribulations began almost the moment it embarked on its IPO journey. It’d planned on raising about $10 billion and a valuation of as much as $100 billion by taking advantage of CDRs: a new instrument Beijing pushed to entice companies to list at home,” Bloomberg reports. “But that fell apart when it couldn’t adequately address questions posed by regulators, including how a company that gets the vast majority of revenue from phones would pitch itself as an internet company.”